subject: How Do I Go Bankrupt? [print this page] The question "how do I go bankrupt" may seem like a simple question with a simple answer -
Q: How do I go bankrupt?
A: Spend all of your money!
But to anyone that's in serious debt or having severe money problems to the point where you could lose all of your assets then bankruptcy can be a last resort solution. It's a decision that shouldn't be taken lightly and you should look into other debt solutions first.
If you've covered all the options and you have no choice but to declare bankruptcy then a bankruptcy order will take away the stress of your debt and give you time to re-organise your finances (or have them reorganised for you) without having the people you owe money to putting pressure on you. It also means that your assets will be divided accordingly to the people you owe money to.
How to go about declaring bankruptcy: You'll need to present a bankruptcy petition to a court of law which could also be made by your creditors. You need to show the court that you are unable to pay your debts and present a statement of affairs that prove you do not have suitable assets to pay off your debts.
It's also possible that your creditors can petition for your bankruptcy which means that, if they are successful, you'll have to carry out any instruction the court gives you. In this situation you'll also be able to try and reach an agreement with you creditors about how much you owe them before the proceedings continue.
It's possible that you won't have to attend a court hearing, but if one is arranged then you'll be expected to attend. This will normally take place in your local county court. In any event, you will be appointed an "Official Receiver" or a third party trustee to gather details of your assets and liabilities from your bank, building societies; anywhere you have or owe money to.
If you have assets of two thousand pounds and debts less than twenty thousand pounds then you may be able to be considered for an IVA (Individual Voluntary Agreement) as a feasible alternative to bankruptcy.
If you do find yourself in crippling debt then make sure you explore all the options and don't feel that you are alone as you won't be. There are thousands of people made bankrupt each year and it's certainly not so much seen as a failure, more as a way to make sure that you have a healthier financial future.
